“Trend  followers use reactive technical analysis. Instead of trying to predict a market direction, their strategy is to react to the market’s movements whenever they occur. This enables them to focus on the market’s actual moves and not get emotionally involved with trying to predict direction or duration.” -Michael Covel/ Trend Following

You Might be a Trend Following Trader if…..

1. …you love buying break outs above resistance and new all time highs.
2. …big trends make you happy not angry.
3. …you do not trade the concept of something being overbought you just use a trailing stop.
4. …your trading decisions are based on what is happening now, not your opinions, your fears of what will happen, or your hopes of what will happen later.
5. …you risk a little capital over and over again to make a lot of capital eventually.
6. …you are great at letting your winners run.
7. …trend followers don’t need a story they follow actual price action.
8. …you look for longs in a bull market and shorts in a bear market you are likely a trend follower.
9. …higher highs and higher lows are one of your best indicators to go long.

The following article is an excerpt from Trade Like a Stock Market Wizard: How to Achieve Super Performance in Stocks in Any Market by Mark Minervini with permission from McGraw Hill Publishing.

How to Handle a Losing Streak

A losing streak usually means it’s time for an assessment. If you find yourself getting stopped out of your positions over and over, there can only be two things wrong:

1. Your stock selection criteria are flawed.

2. The general market environment is hostile.

Broad losses across your portfolio after a winning record could signal an approaching correction in a bull market or the advent of a bear market. Leading stocks often break down before the general market declines. If you’re using sound criteria with regard to fundamentals and timing, your stock picks should work for you, but if the market is entering a correction or a bear market, even good selection criteria can show poor results. It’s not time to buy; it’s time to sell or even possibly go short. Keep yourself in tune with your portfolio, and when you start experiencing abnormal behavior, watch out. Jesse Livermore said, “I’m never afraid of normal behavior but abnormal behavior.” >> Read More

Gold prices are down about 12.5% since the start of April. But global central banks have been increasing their reserves of the yellow metal.

A new report from the World Gold Council shows that central banks bout 109 tonnes of gold in the first quarter.

This was the seventh straight quarter in which they purchased over 100 tonnes of gold.

Central banks held 31,735.4 tonnes of gold as of May 2013. This was up from 31,694.8 tonnes as of April 2013.

Gold entered a bear market during that quarter.  In the current quarter, gold has gone from $1,603 on April 1 to below $1,400 today.

According to the WGC, Russia and South Korea were among the biggest buyers of gold. >> Read More

The most important thing you must learn in every market cycle  is where the money is flowing. It is flowing into the companies where the earnings are growing. As long as mutual funds have capital in flows instead of net out flows then they must put new money to work investing in stocks. If you want to make your job as a trader much easier then find where the flow is going. Mutual fund managers can not go to an all cash position they can only move money around. A bear market sinks most stocks because managers have to sell everything to raise money to redeem shares. In an uptrend they have to buy stocks with the incoming money flows. Where does this money go? It goes into the sectors and stocks that are in favor due to increased earnings in a sector and individual stocks that are dominating their sector and changing the world in the process. You want the leaders not the has been. You want the best the market has to offer. Where are consumers dollars flowing into? That is where the money is going. What companies have the best growth prospects? The stock can only grow in price if the underlying company does. Mutual fund managers are the biggest customers in the market when they start buying a stock that increases huge demand and price support.

Your job is to follow the big money, shorting in bear markets, going long in bull markets. Following the trend of what is in favor. Do not fight the action, flow with it.

Quit having opinions and start being a detective looking for the smart money, the fast money, the big money and where it is going now.

Hugh Hendry, manager of the hedge fund Eclectica Asset Management, is out with his first quarter investor letter.

 ValueWalk has obtained a copy.

Like many other big names in the hedge fund world, Eclectica significantly underperformed the S&P 500 in the first quarter of 2013, returning only 3.1% versus the index’s 12.0% gains.

“There were gains from long positions in consumer staples and Japanese stocks, as well as gains from shorts in industrial commodity related stocks,” writes Hendry of the Eclectica’s Q1 performance. “In FX, the Fund profited from being long the US dollar.”

On the other hand, “Offsetting losses came primarily from long positions in commodity futures, spread across gold, oil and softs.” >> Read More

In a bull market bear factors are ignored. In a bear market bull factors don’t matter.

When a man makes his play in a commodity market he must not permit himself set opinions. He must have an open mind and flexibility. It is not wise to disregard the message of the tape, no matter what your opinion of crop conditions or of the probable demand may be. I recall how I missed a big play just by trying to anticipate the starting signal. I felt so sure of conditions that I thought it was not necessary to wait for the line of least resistance to define itself. I even thought I might help it arrive, because it looked as if it merely needed a little assistance.

In a narrow market,when prices are not getting anywhere to speak of but move within a narrow range, there is no sense in trying to anticipate what the next big movement is going to be up or down. The thing to do is to watch the market, read the tape to determine the limits of the get-nowhere prices, and make up your mind that you will not take an interest until the price breaks through the limit in either direction. A speculator must concern himself with making money out of the market and not with insisting that the tape must agree with him. Never argue with it or ask it for reasons or explanations. Stock-market post-mortems don’t pay dividends.

Do you wish to gamble blindly in the hope of getting a great big profit or do you wish to speculate intelligently and get a smaller but much more probable profit?

Last Close :5971

Yesterday Boldly Written to Watch 5910 level (7DEMA ) will act as Crucial Support.It kissed 5930 & taken U-turn !!

Just Have A Eye on 5984 level.Crossover with volume and stays above for 15-20 minutes will take to 6002—6008———-6025 level in hrs only.

Support at 5948.Break with volumes will take to 5925 level.

Will Update More to our Subscribers during Trading Hrs.

Three Consecutive Close above 6000 + Weekly Close will take to 6120—6160 level very soon.

Suppose Not Crosses Recent High of 6025 …………Then also Crucial Support at 5889—-5855 level.

Forget Corporate Results ,Economy …………….When U Track or Trade in Nifty Future.

Just Concentrate on USD Movement ,Crude Oil and have a close eye on Political situation.

-More Details ,More Details ,Intraday levels to our Subscribers.

Our Time Theory Indicates :By July End (Yes in Next 2 months ) will see Unexpected level in NF.

NF can Crash to 5300 or will Try to kiss 6350+ level…………………(Yes ,No if and But )

Updated at 8:15/07th May/Baroda/India

This week’s Chart of the Week video looks at gold and why this is a bear market.

So let’s get technical.

Be Bullish in Bull market, be Bearish in a Bear market, trade what the market gives you and give up your predictions and opinions and follow price.

As Expected :Bajaj Auto ,Zee ,SUN TV ,Lic Housing,Kotak Bank ,Bharat Forge ,Dabur ,Fin.Tech  ……….All Skyrocketed !!!!!(Tons of Money Minted )

In Bata ,Biocon ,IT STOCKS………………As Expected were in Freefall mode !!

101% Just Trade with levels and Have Patience & Trust.

Still Holding :Lic ,Maruti ,Bajaj Auto !!

Long in Aditya Birla ,Kotak 

Last close : 47.70

We see Stock zooming to kiss 59—60 level (Just need Patience for 2-3-4 days )

101% in PANIC –Around 44—45 level (Fall of Rs.2-3 )…………Buy Buy Buy Buy Buy Buy !!!

Today ,Once crosses and Trades above 48 level …………………We see Unexpected BLAST.

Once crosses 48 ,We see Nonstop Rally upto 51-52—————55 level in hrs only.

-Yes ,More then Rs.10 on card………………………!!!In 3-4 Days ,Will see Unexpected level !!

Big Industrial House Mutual Fund (Big Buying to start ).One thing is sure…….he indicated us that Mind Blowing result +Some hot news too on card.

Who is SELLING this stock from last 6-7 sessions ???Results known to Insiders ?

We see Target :463-460 level.Once Breaks 460 with volumes and trades below this level will take to 450–447———-437—433 level in hrs only.

487—————-495.50 are Hurdles.If Results are good +fantastic then it will have to cross 495.50 to show real power.

We see PANIC upto 80–78.50 & there after ??Who will save this stock ??

Once Breaks 78.50 with volumes….Next Target :74——72.50 in hrs only.

(Below 86 ,Bears will have Upperhand )

Stock will Try to kiss 1934——————1956 level !!!!!

Above 1866 ,No worry for Bulls.

(Those who Bought above 1810 level after our Call ………..Really Minted Money )

We see Rally upto 1050—————-1059.50 & there after will zoom zoom zoom to kiss 1088—-1097.50 level.

(Buy Buy Buy @ Opening bell and in panic too Buy it )

Just Watch :1116 & 1127 level……………..as Hurdles.

Crossover with volumes will take to 1160———————1174 level in hrs only.

Support @ 1085—1080 level.(Buy in panic )

Below 793 level…………………………Don’t Hold Long !!!

We see PANIC PANIC upto 782—778———————–767 level in hrs only.(On Rise ,Sell Sell Sell )

Yes ,Either its CIPLA ,Dr.Reddy or Divis Lab……….All Three Hot Hot Hot !!

Will Update MORE to our Subscribers.

Updated at 8:28/29th April/Baroda

The grid of charts shown below perfectly illustrates the under performance of emerging markets in recent years. Let us quickly cover some of the more important details for the four main BRICs:

• Chinese Shanghai Composite has been in a downtrend since late 2007, despite a powerful bear market rally in early parts of 2009. The index is 63% below its all time highs and 35% below its peak in late 2009. On the other hand, the index is still up 27% from the November 2008 lows. China’s official debt to GDP ratio stands at 22% (unofficial might be a lot higher just like in the US & EU), equity market P/E at 9.4 and price to book at 1.44.
• Indian Bombay Sensex recently re-tested the 2008 and 2010 highs around 20,000 – 21000 point range. The index is 10% below its all time highs and about 6% below its peak recent peak at the begging of the year. Indian equities have experienced a tremendous gain of 125% from the March 2009 lows. India’s official debt to GDP ratio stands at 68% (unofficial might be a lot higher just like in the US & EU), equity market P/E at 16.2 and price to book at 1.9.
• Russian Trading System remains in a downtrend since its 2011 highs around 2,123 points. Russian being one of the world’s largest commodity exporters, the index hold a close correlation with the CRB as well as Crude Oil prices. The RTSI is 45% below its all time highs in 2008 and about3 6% below its last major peak in April 2011 (same time Crude Oil peaked). Russia’s official debt to GDP ratio stands at only 11% (unofficial might be a lot higher just like in the US & EU), equity market P/E at 5.2 and price to book at 0.7.
• Brazilian Bovespa is currently re-testeing its support level from 2011 and 2012 corrections around 52,000 point range. Similar to the Russian equity story, the index hold a close correlation with the CRB prices, as Brazil exports large amount of commodities to the world. The Bovespa is 27% below its all time highs in 2008 and about 26% below its peak recent major peak in 2011 (just like the CRB Index). Brazil’s official debt to GDP ratio stands at 65% (unofficial might be a lot higher just like in the US & EU), equity market P/E at 13.2 and price to book at 1.6.

S&P 500 has been outperforming the Emerging Markets since late 2010 and might continue to do so for awhile longer (even though short term metrics suggest a technical mean reversion for the oversold GEMs). Investors keen to allocate funds to emerging markets in the future will have to also be believers in the commodity story (far and few commodity bull left these days). Finally, China is the most depressed of all the BRICs when looking at the price, while Russia is the cheapest on valuations (and incredibly low debt levels).

Revulsion is normally the last stage of a bear market, wherein individual investors are repulsed by an asset class and are in the process of vomiting whatever little holdings they have of the asset in question. It is a process that can take time and is extremely painful for market participants, as the asset in question can seemingly have no bottom and just goes down in value on a daily basis. Investors continue to sell down, irrespective of the price. Ultimately, they form a bottom for the respective asset, as they drive valuations down to very attractive levels.

For equity markets in India, for domestic investors and mid-cap stocks at least, we are starting to move towards the revulsion phase of the asset cycle. We are not there yet; but if things continue to move in the direction they have, we will be there soon.